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Bring salted water to boil in a medium pot over medium-high heat. Pour in polenta and stir 2 minutes. Reduce heat to low, cover, and simmer 30 minutes, stirring every 10 minutes to make sure polenta isn’t sticking or burning.
Right before serving, stir milk, Parmesan and butter into polenta. Season with sea salt and pepper.
Meanwhile, heat a drizzle olive oil in large skillet over medium heat. Add shallots and sweat 2 minutes, until softened and slightly translucent. Season with sea salt, then add mushrooms. Cook 5 minutes, until mushrooms are caramelized and softened.
Pour in sherry to deglaze pan and stir to loosen any browned bits from bottom. Cook off alcohol 1 minute. Add vegetable stock and season with sea salt and pepper. Bring to boil, then let liquid reduce 10 minutes. Remove from heat.
For gremolata: In small bowl, combine garlic, parsley and lemon zest. Season with sea salt.
Divide hot polenta between serving bowls and top with mushrooms and gremolata and parmesan shavings, if desired.